If you own — or are underwriting — an older multifamily building in the City of Santa Barbara, the rules changed in early 2026. The City adopted a temporary rent freeze, and it was explicitly framed as the first step toward permanent rent stabilization. That combination reshapes how covered buildings should be valued and operated. I'm Brian Cooper, REALTOR® at eXp Realty (DRE# 01434286). Here's what the freeze does, who it covers, and what it means before you buy, sell, or set a rent.
Quick answer
For older Santa Barbara apartment buildings, in-place rents are frozen at their December 16, 2025 level while the moratorium is in force. Newer buildings and most single-family homes and condos are exempt. The freeze is temporary on its face, but it was designed as a bridge to a permanent program, so owners of covered buildings should treat rent growth on existing tenancies as paused and plan for a tighter regulatory regime ahead.
What the ordinance actually does
Ordinance No. 2026-6206 is a temporary rent-increase moratorium, not a full rent-control code. Its core mechanic is a freeze: for a covered unit, a landlord may not increase an existing tenant's rent above the amount that was in effect on December 16, 2025. It is a hard freeze to a reference date, not a capped annual percentage. The City Council adopted it in January 2026 by a narrow 4-3 margin, and it took effect on February 26, 2026.
The measure is expressly interim. It was adopted while the City studies and drafts a permanent rent-stabilization program — the reason it carries an automatic sunset. Its purpose, as framed by the Council majority, was to hold the line on rents for existing tenants in older buildings while the longer-term policy is worked out.
Which units are covered
Coverage is the pivotal question for any owner. As reported, the moratorium covers residential units with a certificate of occupancy issued before February 1, 1995 — a date chosen to align with California's Costa-Hawkins Rental Housing Act, which generally exempts newer construction from local rent control. Older, larger multifamily buildings are therefore the primary targets.
Exemptions, as reported, include:
- Units with a certificate of occupancy on or after February 1, 1995 (newer construction).
- Most single-family homes and condominiums that are separately alienable under state law (a Costa-Hawkins exemption).
- Certain government-owned and subsidized housing.
Exemptions have conditions, and edge cases exist (for example, single-family rentals owned by certain corporate entities can lose the Costa-Hawkins exemption). Verify a specific building's coverage with the City rather than assuming from the year built alone.
When it expires
The ordinance automatically expires on December 31, 2026, or on the operative date of a permanent rent-stabilization program established by ordinance, whichever comes first. In other words, the freeze either sunsets at year-end 2026 or is replaced by a permanent program before then. Owners should not assume the regulatory pressure ends when the freeze does — the more likely path is a transition into a permanent framework.
What it means for landlords and investors
The freeze changes the economics of covered buildings in concrete ways:
- No mark-to-market on renewals. For covered units, you cannot raise a sitting tenant's rent above the December 16, 2025 level while the freeze is in force. Value-add plans premised on stepping in-place rents up to market are paused.
- Underwrite conservatively. Buyers of covered buildings should price on actual, frozen rents — not on pro-forma market rents — and stress-test for a permanent program that could cap increases going forward.
- Verify each unit's frozen rent. In diligence, confirm the December 16, 2025 rent for every covered unit; that figure becomes the ceiling.
- Exempt assets look relatively more attractive. Newer construction and qualifying single-family/condo rentals aren't covered, which can shift investor demand toward exempt product.
- Watch the successor program. The permanent rent-stabilization ordinance — discussed toward a 2027 timeframe — will define allowable increases, banking, capital pass-throughs, and just-cause rules. Those details will drive long-run returns far more than the temporary freeze.
Why a "temporary" freeze deserves permanent attention
It is tempting to treat a measure that sunsets at the end of 2026 as a short-lived inconvenience. That reading misses the point. The Council adopted the freeze specifically as a bridge while it builds a permanent rent-stabilization program, and the ordinance's own expiration language ties its end to "the operative date of a permanent rent-stabilization program." In other words, the most likely way the freeze ends is by being replaced with something durable, not by a return to an unregulated market. For an owner deciding whether to buy, hold, or sell a covered building, the operative planning assumption should be a tightening regulatory environment, not a snap-back. The details of any permanent program — the allowable annual increase, whether unused increases can be "banked," how capital improvements and operating-cost pass-throughs are handled, and the scope of just-cause and relocation rules — will determine long-run returns far more than the temporary freeze itself. Those provisions are being debated now, which is precisely why owners should follow the City's rent-ordinance process closely and weigh in while the framework is still being written.
Vacancy decontrol and just cause
Under California's Costa-Hawkins Act, a local ordinance generally cannot prevent an owner from setting the initial rent for a new tenancy after a lawful vacancy (vacancy decontrol). A temporary moratorium restricts increases to existing tenants; how it interacts with new-tenancy pricing, and whether any anti-eviction or just-cause provisions apply, should be confirmed with the City and your attorney. Do not assume you can engineer vacancies to reset rents — separate state and local tenant-protection laws (including the Tenant Protection Act) constrain evictions.
How the freeze fits California's broader rent law
The local moratorium doesn't operate in a vacuum — it sits on top of two statewide frameworks that already constrain Santa Barbara landlords. The Costa-Hawkins Rental Housing Act exempts newer construction and most separately-alienable single-family homes and condos from local rent control, which is why the City's freeze targets pre-February-1995 multifamily buildings. Separately, California's Tenant Protection Act of 2019 (AB 1482) already caps annual rent increases statewide (generally 5% plus local CPI, up to a 10% ceiling) and imposes just-cause eviction rules on many non-exempt units. For a covered Santa Barbara building, the local freeze is more restrictive than AB 1482 for the freeze period — a hard hold rather than a capped increase — while AB 1482's just-cause protections continue to apply in the background. The interaction of state caps, state just-cause rules, and the local freeze is exactly the kind of overlap where owners get tripped up, which is why coordinating with a landlord-tenant attorney is worth the cost before serving any notice.
Selling or refinancing a covered building
The freeze changes both sides of a transaction. For a seller, buyers will underwrite a covered building on its actual frozen rents, so the "loss-to-lease" gap between in-place and market rents cannot be closed during the freeze — and a permanent rent-stabilization program could keep it partly closed indefinitely. That tends to compress values for covered assets relative to the pro-forma many owners carry in their heads. For a buyer or a refinancing owner, lenders will size debt on the verified frozen rents, not aspirational market rents, which can reduce loan proceeds versus a naive underwrite. The practical takeaway is consistency: whether you're buying, selling, or refinancing a covered Santa Barbara building, the December 16, 2025 rent roll is the number that matters, and everyone in the deal should be working from the same verified figures.
What to do now
- Confirm coverage of each of your Santa Barbara units with the City.
- Document the December 16, 2025 rent for every covered unit.
- Pause noncompliant increases on covered units and review any notices already served with your attorney.
- Re-underwrite acquisitions and refinances on frozen, verified rents.
- Track the permanent program and participate in the City process if you own here.
Frequently asked questions
Is there a rent freeze in the City of Santa Barbara in 2026?
Yes. The Council adopted Ordinance No. 2026-6206 in January 2026 (4-3); it took effect February 26, 2026, freezing covered-unit rents at the December 16, 2025 level. As of August 2026 it remains in effect. Confirm current status with the City.
Which units are covered?
Generally residential units with a certificate of occupancy before February 1, 1995. Newer construction, most separately-alienable single-family homes and condos (Costa-Hawkins), and certain subsidized housing are exempt. Verify a specific building with the City.
What rent amount is frozen?
For covered units, the rent in effect on December 16, 2025 — a freeze to that date, not a capped percentage. Confirm how it applies to your tenancy.
When does it expire?
Automatically on December 31, 2026, or when a permanent rent-stabilization program takes effect, whichever is earlier. Confirm the current expiration and any successor ordinance with the City.
Does it apply to single-family homes and condos?
Generally no — most separately-alienable single-family homes and condos are exempt under Costa-Hawkins, as is post-February-1995 construction. Exemptions have conditions; confirm a specific property's status.
Can I raise rent for a new tenant after a vacancy?
Costa-Hawkins generally preserves setting the initial rent for a new tenancy, but a moratorium restricts increases to sitting tenants and separate laws limit evictions. Confirm the interaction with the City and your attorney before relying on it.
Is Santa Barbara moving toward permanent rent control?
Yes — the freeze was framed as a first step while the City develops a permanent rent-stabilization program, discussed toward a 2027 timeframe. Nothing is guaranteed; track the City's process and confirm the current status.
